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You Can Still Apply for Title Loans While Making Car Payments
Obtaining approval for a traditional bank loan can be a big challenge. If your credit score is less than perfect, you may face denial or endure loans with high-interest rates and hidden fees. With the recent inflation rise, the cost of living has increased, but not everyone can afford their bills anymore.
If you feel stuck financially, you may be wondering, can you use a financed car as collateral for a loan? It doesn’t matter if you are still making payments on your vehicle– you can potentially qualify for quick cash. This option can be great for people who need help paying for an unexpected expense but think they don’t have any choices available.
Inquiring about title loans with a financed car as collateral can be simple– below are the steps involved! You can start today by filling out this pre-qualification form or calling to speak directly with a title loan representative.
How Does a Collateral Loan Work?
Title loans differ from traditional bank loans because they rely on physical collateral if someone fails to pay the money back. They work by allowing someone to borrow off of the available equity in their vehicle. In exchange, a lender places a lien on the car title and removes it once the funding is repaid.
Traditional bank loans are called unsecured because they do not use this collateral system. Instead, lenders look at a person’s credit history when determining their approval for money. If you have a bad credit score, it may indicate that you’re irresponsible with money, and banks won’t want to work with you.
Title loan lenders will run a credit check during your inquiry, but they care more about these two factors:
- How Much Equity Your Car Has
- If You Have the Income to Repay the Loan
The equity in your car can affect your overall approval and loan amount! This number is why a borrower must have some positive equity in their vehicle before applying for a title loan.
Additionally, federal law requires title loan companies to check that a person has enough consistent income before approving the money. You don’t need to work a 9-5 job to qualify potentially! Many alternative income sources, like workers’ compensation or Social Security benefits, may be accepted during your inquiry.
How Can I Use My Financed Car for a Title Loan?
You can still be making payments on your vehicle when you inquire about a title loan! What matters more, as mentioned earlier, is how much equity the car has and if you have a consistent income.
You must meet the requirements for a title loan if you want to apply with a financed car. They are:
- Be an Adult at Least 18 Years of Age or Older
- Have a Qualifying Vehicle Title in Your Name
- Have a Qualifying Vehicle With Some Positive Equity
- Show Proof of Income Source
If you are still paying off your vehicle, you must sign an authorization form allowing lenders to pay off the remaining amount. That way, if the lenders repossess your car, they have the legal authority over it.
How to Avoid Car Repossession During a Title Loan?
Lenders repossessing your vehicle is the most significant risk associated with a title loan. Repossession only happens if a borrower fails to make monthly payments, and the legal details can vary depending on your state.
The best way to avoid car repossession during a title loan is by paying back the loan on time! There are several ways to ensure you never miss a payment. You can set up an automatic withdrawal from your bank account, send a check in the mail, or visit a participating money transfer location to pay in person.
Use Your Financed Car as Collateral for a Title Loan Today!
It doesn’t matter if you’re still making payments on your vehicle. You can still inquire about title loan funding if you need cash quickly! Qualified borrowers may receive access to the financing within the same business day as inquiring, which means this can be a great emergency option.
Start today by filling out this pre-approval form or calling to speak directly with a title loan agent.